SHAREHOLDER POLICY
I.M. Skaugen ASA aims to create shareholder value through our emphasis on ‘cost and service leadership’, constantly improving customer service and focusing on operational efficiency, thereby growing the business profitability. The company favours a dividend policy based on financial performance, but the increase in share price should, over time, account for the largest part of the return on shareholder investment. When appropriate, and particularly when the share price is considered low, the company aims to buy back its own shares from the market.

MANDATES GRANTED TO THE BOARD OF DIRECTORS
On 1st March, 2004, the company’s Ordinary Annual General Meeting renewed the authorisation, granted to the Board of Directors, to acquire up to 549,398 treasury shares on behalf of the company, corresponding to 10 per cent of the current share capital. The highest price that may be paid is NOK150, and the lowest price is NOK1. The authorisation remains in effect for 18 months from 1st March, 2004.

The authorisation is registered in the Register of Business Enterprises.

BOARD OF DIRECTORS of I.M. SKAUGEN ASA
Please refer to our web site www.skaugen.com for information on the membership of the Board, including details related to the date of election, term of office, relevant expertise, other appointments and/or employment, as well as details of any business or personal connection to the company.

THE IMSK SHARE PERFORMANCE
The IMSK share price on the Oslo Stock Exchange increased by 8.8 per cent during 2004, from NOK142 to NOK154.50, with a low of NOK132 in August and a high of NOK167 in March and April. The average share price during the year was NOK149.42 with a yield of 13.73 per cent, including the dividend of NOK7 per share paid in March. During the same period the Oslo Stock Exchange Benchmark Index (OSEBX) increased by 38.45 per cent and the OSE 2030 Transportation Index (OSE2030GI) by 73.37 per cent.

Source: EconWin

TRADING VOLUMES
A total of 350,000 shares were traded in 2004, equal to 5.9 per cent of the total shares outstanding at year-end, (521,000 shares and 9.5 per cent in 2003). The share was traded on the Oslo Stock Exchange on 143 out of 231 trading days (135 out of 247 in 2003).

DIVIDEND
The Board will propose to the Annual General Meeting on 1st March 2005, that a dividend of NOK7.50 per share is paid for 2005 (NOK7.00 for 2004).

CONVERTIBLE BOND
I.M. Skaugen placed a convertible bond of NOK124 million in to the Norwegian market in June 2001. The loan is listed on the Oslo Stock Exchange, ticker IMSK00 (ISIN NO 001 0097470). The bonds can be converted to IMSK shares prior to 28th April 2006, at a conversion price of NOK60. If the dividend of NOK7,50 is approved as recommended by the Board, the equivalent amount per share will be paid to the bondholders at time of conversion. This in addition to NOK3,5 from last years dividend - total NOK11 per share.

The bond programme could increase the I.M. Skaugen share capital by 1,075,000 shares (not including I.M. Skaugen’s own holding) over the existing 5,977,310 shares, or by 20 per cent.

During 2004 NOK29 million of the convertible bond was converted into 483,333 shares and NOK29 million was repurchased by the Company. Bonds outstanding at 31 December 2004 were NOK64.5 million (face value).

The convertible bonds traded at an average of NOK233,89 in 2004, with a low of NOK225 in September and a high of NOK251 in October.

BOND
I.M. Skaugen placed a NOK bond through Nordea Markets on 28th May, 2004. The loan amount is NOK300 million. The bond carries a coupon of three months NIBOR + 4.75 per cent and matures on 2nd June, 2009. The loan is listed on the Oslo Stock Exchange, ticker IMSK01 (ISIN NO 001 0226400).

The proceeds from the issue will be used for general refinancing purposes and to strengthen our balance sheet and financial resources going forward.

The bonds traded has performed well since August and was traded at 103.8 in December 2004.

BUY BACK OF SHARES – REDEMPTION OF SHARES
At year-end 2004, I.M. Skaugen held no treasury shares. The total of 1,158,808 shares has been repurchased since 1999 at a total cost of NOK65.5 million or NOK56.52 per share.

20 largest shareholders in I.M. Skaugen ASA as per 31.12.2004

INVESTOR RELATIONS
I.M. Skaugen aims to keep shareholders, analysts and investors updated about the company’s operations in a timely fashion both by releasing information regularly and by holding presentations. The financial calendar showing publication dates for the company’s quarterly interim reporting is available on our website. I.M. Skaugen focuses on achieving and maintaining a transparent and accountable financial reporting system. Accurate and thorough information is key to securing reasonable pricing of the company, based on underlying values and earnings. It is our policy to report promptly, within 10 working days of the end of each quarter.

The company’s website at www.skaugen.com includes a special section with information for investors. Reports, presentations, press releases and other relevant information is immediately available, as is the facility to sign up for press releases via e-mail.

I.M. Skaugen ASA obtained the information - and English symbol on 4th October 2004.

ANNUAL REPORT FORMAT
The Annual Report in full is being produced electronically only. It will be fully available on our website, www.skaugen.com. A printed report, providing the main financial and operational highlights, will be distributed to the shareholders.

RISK ADJUSTMENTS
Under the Norwegian tax reforms, which came into force on 1st January, 1992, the cost of shares for tax purposes is to be adjusted annually to reflect the company’s retained taxed earnings in order to prevent double taxation. This ‘RISK’ adjustment is made with effect from 1st January in the following year, but the final figure is not available until the company’s tax assessment is finalised in October/November. Therefore, only those shareholders registered on 1st January benefit from the adjustment. The provisional RISK adjustment for 1st January, 2005 is minus NOK7.5 per share.